E-commerce: Mobile, social, local commerce drivers of growth for startups [16May11] - 0 views
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In the fast-moving world of Internet innovation, the search for the winning combination of strategies often means companies are continually rolling out features to match their competitors.Take local deals, territory that Chicago-based Groupon claimed with its launch more than two years ago. Google, Facebook, Yelp, OpenTable and a host of other Web-based companies have introduced their versions of discount offers since then. And many of these players have started allowing users to "check in" to local businesses on their mobile phones, a concept popularized by Foursquare and other location-based services.This ongoing flurry of activity is underpinned by a common desire to conquer three important categories of growth for consumer-oriented Internet companies: mobile, social and local commerce. The race to find the right mix is crucial for capturing revenues and the loyalty of consumers whose sources for information and entertainment are becoming increasingly fragmented.
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"A mobile and social Web, both on the advertising side and e-commerce side, is going to be more highly monetizable," said Mendez, whose private-equity firm focuses on privately held companies such as Facebook. "It's more likely to turn eyeballs and visitors into transactions and dollars spent."Companies are building on the three pillars of mobile, social and local commerce in different ways, focusing on core strengths before adding other capabilities.
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Groupon, for example, built its business model on the idea of social plus local commerce, creating a group-buying platform as a new form of local online advertising. Last week, it launched a mobile application called Groupon Now that delivers deals to consumers based on their location.
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New York-based Foursquare tackled the combination of mobile and social at its inception. The service initially focused on letting friends share information about their whereabouts through their phones and collect virtual badges for check-ins. As the company has racked up nearly 9 million users worldwide and more than 500 million check-ins during 2010, it has turned increasing attention to the local commerce component.
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Foursquare built a self-service platform for merchants to offer special deals that give consumers another incentive to check in, with perks ranging from discounts to reserved parking spots.
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The startup also sees opportunities in mobile-based loyalty programs and worked on a pilot with Dominick's parent Safeway that linked the grocery chain's rewards card to a member's Foursquare account. A person who had checked in to a gym at least 10 times a month, for example, might receive coupons for Gatorade.
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"Commerce is happening when you're there and mobile puts you there," said Jake Furst, Foursquare's business development manager.